The how and why of a firm’s approach to CSR and sustainability: a case study of a large European company

This paper aims to analyse “how” and “why” a company engages in CSR and sustainability. The “how” concerns the features of the firm’s CSR and sustainability approach, defined in terms of a firm’s strategy (implemented issues, initiatives and activities) and organization (organizational structures and roles and managerial systems adopted). The “why” refers to the key determinants, both internal and external, of CSR and sustainability. Finally, how the firm’s CSR and sustainability approach evolves over time and the relation between CSR determinants in various stages of the CSR evolutionary path are also investigated. The research method is based on the longitudinal analysis of a case study concerning a large multinational company operating in the telecommunications industry in Europe. The analysis of the case study shows that sub-cultural differences in the approach to CSR and sustainability may occur across hierarchical levels and functional units. Moreover, embedding CSR and sustainability principles doesn’t follow a linear and continuous process, made by sequential stages. Indeed, it can be characterized by an up and down evolutionary path, based on different stages with a changing emphasis given to CSR and sustainability issues. Finally, we find that the firm CSR and sustainability approach is not an autonomous choice, but it is a consequence of the contingent role played by both the external and the internal drivers and by their relative importance during the company’s CSR history.     

Organizational Antecedents of a Mining Firm's Efforts to Reinvent Its CSR: The Case of Golden Star Resources in Ghana1

This article reports a case study of how organizational antecedents, specifically leadership choices, decisions, culture, and organizational learning, impact and construct the corporate social responsibility (CSR) initiatives of a Canadian mid‐tier mining firm operating in Ghana. The primary objective of the article is to demonstrate, through an in‐depth study of a single case, that organizational‐ and firm‐level antecedents are a powerful tool for understanding how ethical, socially responsible, and community‐relevant behaviors of a mining firm in a developing area come to be constructed. The article thus contributes to the conceptual and applied literatures on CSR by suggesting that much as the voice of moral suasion, advocacy, and critical censure have been important motive forces behind CSR efforts, it seems that the sustainability and community relevance of CSR efforts are linked to identifiable internal response mechanisms that dispose or enable firms to behave in responsible ways.     

Toward a theory of local legitimacy by MNEs in developing nations: Newmont mining and health sustainable development in Peru

This paper describes a current initiative by Newmont Mining Corporation (Newmont) to develop sustainable community benefit in communities around its mining operations in Peru in response to heightened criticism of Newmont by non-government organizations and the media. Using anthropologically oriented methods, a community health assessment project in an area of projected mining is described in detail in this paper. This case adds to London and Hart's social embeddedness strategy for multi-national enterprises (MNEs) working in developing nations by introducing a locally-based community interaction model, which we describe as a local legitimacy strategy, in an effort to bring about sustainable development in the communities that surround a MNE's production activities. The components of our local legitimacy strategy include co-analysis of community needs by MNEs and community partners, and planning and investment in developments to enhance the social fabric and the physical infrastructure needs of communities. The developing world is getting better at publicizing and monitoring the work of MNEs. We argue that it will be increasingly necessary for MNEs, like Newmont, to add local sustainable benefit into their strategic mix to gain the social license and legitimacy that is needed to operate in poorer communities.     

Corporate Social Responsibility through Cross‐sector Partnerships: Implications for Civil Society,the State,and the Corporate Sector in India

Corporations are increasingly forced to widen their agendas to include social and environmental concerns, or corporate social responsibility (CSR). This development has been recorded in the current academic debate, and the views regarding its implications for business, the state, and civil society diverge. However, there is agreement within the CSR and corporate governance literatures that there is a lack of thorough empirical studies of these effects. Based on a case study of the multinational wind energy company Suzlon Energy's CSR projects in rural India, this article contends that CSR projects implemented through cross‐sector partnerships can help to build the capacities of civil society organizations (CSOs). Although the risk of corporate steering of the civil society agenda is reduced when CSR prioritizes community needs over business imperatives, CSOs tend to bear the highest costs in partnerships, through credibility losses and insecurity concerning project terms and funding, reinforcing the importance of critical cooperation and complementary core competencies in cross‐sector partnerships. The results have implications for the strategies of corporations, CSOs, and governments as well as for the planning of national and international development aid.     

Looks‐Based Hiring and Wrongful Discrimination

Popular clothing retailer Abercrombie and Fitch (A&F) is well‐known for hiring attractive store sales clerks. While the economic benefits of this hiring practice for the company are undeniable, many commentators contend that it constitutes wrongful discrimination against unattractive job seekers. In this article, I explore the ethics of A&F‐style lookism and challenge two common perspectives on this issue. I argue that on one hand, looks‐based hiring cannot be defended based on its economic benefits alone, as race‐based hiring also can be profitable in some circumstances. At the same time, I reject arguments that looks‐based hiring is not “job relevant” given its economic impact in many contexts. Through a comparison between race‐ and looks‐based hiring, I conclude that at least for businesses that are relevantly similar to A&F—firms for which lookism produces clear economic benefits—looks‐based hiring is permissible.     

Managing Demand Risk in Tactical Supply Chain Planning for a Global Consumer Electronics Company

We consider the problem of managing demand risk in tactical supply chain planning for a particular global consumer electronics company. The company follows a deterministic replenishment‐and‐planning process despite considerable demand uncertainty. As a possible way to formally address uncertainty, we provide two risk measures, “demand‐at‐risk” (DaR) and “inventory‐at‐risk” (IaR) and two linear programming models to help manage demand uncertainty. The first model is deterministic and can be used to allocate the replenishment schedule from the plants among the customers as per the existing process. The other model is stochastic and can be used to determine the “ideal” replenishment request from the plants under demand uncertainty. The gap between the output of the two models as regards requested replenishment and the values of the risk measures can be used by the company to reallocate capacity among different products and to thus manage demand/inventory risk.     

The cut-off rate for investment decisions in growth companies

In this article the author attempts to define cut-off rate for capital budgeting decisions of a “growth company” and to relate it to the firms long range planning. Dr Chandra argues that conventional measurement of cost of capital cannot be used in the growth company. In brief, he defines the cut-off rate in this type of company as— dividend yield plus the rate at which dividend is expected to grow.     

When Do Multinational Companies Consider Corporate Social Responsibility? A Multi‐country Study in Sub‐Saharan Africa

While African countries are becoming more and more relevant as host countries for suppliers of multinational companies little is known about corporate social responsibility (CSR) in this region. To fill this gap, the present article explores CSR considerations of foreign affiliates of multinational companies when choosing local African suppliers. The article suggests a model of three types of determinants, namely firm characteristics, exports, and intra‐trade. Analyses of a large‐scale and quite unique firm level data for more than 2,000 foreign owned firms in 19 sub‐Saharan African countries demonstrate that firms importing intermediates from their parent company abroad are more likely to implement CSR. Similarly, CSR plays a larger role for affiliates that export to developed countries. Different determinants affect environmental and social CSR activities.     

Distressed Selling by Farmers: Model,Analysis, and Use in Policy‐Making

Among the various governmental schemes that support agriculture, support prices have been adopted by many developing countries. A support price for an agricultural crop is a guaranteed price at which a governmental entity agrees to purchase that crop from farmers. Despite this surety, a surprising practice of “distressed” selling 1 1 A 1‐minute news clip on distressed selling is available at: https://www.youtube.com/watch?v=U2lr5rBTpaU
has been widely observed in practice: Farmers sell a significant portion of their crops to outside agents at prices much lower than the support price. We build a tractable stochastic dynamic programming model that captures the salient features of the ground realities—limited as well as uncertain procurement capacity, high holding costs for the farmers, and lack of affordable credit—that conspire to induce distressed selling and, consequently, a significant loss of welfare of the farmers. Using real data on procurement under a support‐price program, we establish the accuracy of our model's prediction on the volume of distressed sales. Finally, we show how our model and its solution can serve as a simple and useful tool for policy‐makers to assess the relative impact of the improvements in the main determinants of distressed sales.     

“Chemophobia” Today: Consumers’ Knowledge and Perceptions of Chemicals

This mixed‐methods study investigated consumers’ knowledge of chemicals in terms of basic principles of toxicology and then related this knowledge, in addition to other factors, to their fear of chemical substances (i.e., chemophobia). Both qualitative interviews and a large‐scale online survey were conducted in the German‐speaking part of Switzerland. A Mokken scale was developed to measure laypeople's toxicological knowledge. The results indicate that most laypeople are unaware of the similarities between natural and synthetic chemicals in terms of certain toxicological principles. Furthermore, their associations with the term “chemical substances” and the self‐reported affect prompted by these associations are mostly negative. The results also suggest that knowledge of basic principles of toxicology, self‐reported affect evoked by the term “chemical substances,” risk‐benefit perceptions concerning synthetic chemicals, and trust in regulation processes are all negatively associated with chemophobia, while general health concerns are positively related to chemophobia. Thus, to enhance informed consumer decisionmaking, it might be necessary to tackle the stigmatization of the term “chemical substances” as well as address and clarify prevalent misconceptions.     

Korreferat zum Beitrag: Hanno Merkt,Die Rolle des Bilanzrechts in der aktuellen Corporate Governance-Diskussion

Objective of my discussion is to assess the findings of Hanno Merkt and to provide some suggestions regarding several of the discussed issues. The coactions of company law and capital market regulation as well as codices pertaining to accounting and corporate governance as mentioned by Hanno Merkt call for a differentiated approach. In particular, a distinction regarding capital market orientation of companies as well as regarding differing purposes of individual and consolidated financial statements has to be made. Also, I encourage the research community to discuss the company’s management and monitoring philosophy (“Unternehmensinteresse”) and its enforcement in more detail (again). In my opinion, financial reporting serves the purpose of accountability and therefore is—in this sense—only a part of corporate governance in the area of capital markets.     

Long‐Term Debt and Optimal Policy in the Fiscal Theory of the Price Level

The fiscal theory says that the price level is determined by the ratio of nominal debt to the present value of real primary surpluses. I analyze long‐term debt and optimal policy in the fiscal theory. I find that the maturity structure of the debt matters. For example, it determines whether news of future deficits implies current inflation or future inflation. When long‐term debt is present, the government can trade current inflation for future inflation by debt operations; this tradeoff is not present if the government rolls over short‐term debt. The maturity structure of outstanding debt acts as a “budget constraint” determining which periods' price levels the government can affect by debt variation alone. In addition, debt policy—the expected pattern of future state‐contingent debt sales, repurchases and redemptions—matters crucially for the effects of a debt operation. I solve for optimal debt policies to minimize the variance of inflation. I find cases in which long‐term debt helps to stabilize inflation. I also find that the optimal policy produces time series that are similar to U.S. surplus and debt time series. To understand the data, I must assume that debt policy offsets the inflationary impact of cyclical surplus shocks, rather than causing price level disturbances by policy‐induced shocks. Shifting the objective from price level variance to inflation variance, the optimal policy produces much less volatile inflation at the cost of a unit root in the price level; this is consistent with the stabilization of U.S. inflation after the gold standard was abandoned.     

The Conflict between U.S. Patent Protection and Technological Innovation: Analysis and Problem Solving by Means of the Integrated Causal Model for Innovated Ethic

Criticisms of patent laws for technological innovations in the United States reveal a multifaceted milieu of problems centered around the protection of short‐term economic gain and individual property rights. In this article, we consider this a conflict between current patent laws and the innovation capabilities of organizations. We propose a solution that enables the company to assure its long‐term survival in the face of these restrictions. This presumes that the firm will at least maintain its innovation capacities while preserving the company's ethical values and those of its social environment. We offer a theoretical model that is designed to help managers and policymakers reorient their governance strategies for managing the innovation process, using the “ethics of responsibility,” which establishes the link to individual moral values at the beginning of a governance process as well as the consequences of a decision. Our integrated causal model of ethical innovation for patents is presented and implications for global organizations and possible solutions for patent law process failure are offered.     

Organizational transformation: Handling the double-edged sword of urgency

A central idea in organizational research and practice is that change efforts demand a sense of urgency. It is also commonly accepted that renewal beyond incremental improvements demand individuals and teams to have what earlier research has called a “promotion focus”—to think innovatively, see opportunities, and think long term. Urgency, however, leads to a “prevention focus,” with which teams and their members are more inclined to seek incremental improvements and error reduction. Hence, urgency seems to both support change and prevent it. Earlier research has not established the conditions under which urgency may lead to creative and productive outcomes. This paper aims to do so. In a study of seven change initiatives at a large media company undergoing a serious crisis, we found that urgency cues could be productively handled by managers and project team members when they addressed three core relationships: (a) the success-failure relationship, (b) the safety-accountability relationship, and (c) the operative-strategic relationship. We make three related theoretical propositions regarding the role of urgency in innovation-driven change and transformation.     

Perception of Climate Risk among Rural Farmers in Vietnam: Consistency within Households and with the Empirical Record

Rural farmers in Vietnamese communes perceive climate risk and potential impacts on livelihood within a complex context that may influence individual and household decisions. In a primary survey of 1,145 residents of the Thach Ha district of Ha Tinh province, we gathered data regarding perception about stability in climate, potential risks to livelihood, demographic characteristics, orientation toward risk, and interest in expanding economic activity. Temporal analysis of meteorological and economic indicator data forms an empirical basis for comparison with human perception. We ask the basic question: Are rural farmers’ perceptions of climate consistent with the historical record and reproducible within households? We find that respondents do perceive climate anomalies, with some anchoring on recent extreme events as revealed by climate observational data, and further that spouses disproportionately share perceptions relative to randomly simulated pairings. To put climate‐related risk perception in a larger context, we examine patterns across a range of risks to livelihood faced by farmers (livestock disease, pests, markets, health), using dimension reduction techniques. We find that our respondents distinguish among potential causes of low economic productivity, with substantial emphasis on climate‐related impacts. They do not express uniform concern across risks, but rather average patterns reveal common modes and distinguish climate concern. Still, among those expressing concern about climate‐related risks to livelihood we do not find an association with expressed intention to pursue changes in economic activity as a risk management response.     

When and How to Pursue Corporate Social Responsibility with Core Competencies

We first establish that the pursuit of corporate social responsibility (CSR) can enhance the society's welfare when both market and government imperfections occur, and demonstrate this is likely in most locales across the world. Second, we show that CSR initiatives are most likely successful and sustainable when a firm accurately identifies the benefits and costs of potential CSR initiatives and implements them consistent with its core competencies. We provide three reasons for a firm to focus CSR initiatives on core competencies: to reap economies of scale and scope in building company‐wide knowledge and skills; to promote worker productivity that is integral to the firm; and to exploit the fixed costs associated with managing workers. Each reason provides a distinct way to minimize the costs and increase the gains from pursuing CSR initiatives and provides implications for implementing CSR initiatives.     

The Impact of Nonagility on Service Level and Project Duration*

“Why projects are late” is a fundamental issue in theory and in practice. One well‐established explanation is that a project's network structure can be a significant factor—the “fatter” or more parallel the project, the later the project completion. Herein we show that a lack of agility, which may frequently arise in projects when there are external resources, can also be a significant factor in project delays—both in more serial‐like projects as well as more parallel ones. Specifically, this article formally characterizes the concept of agility in projects, shows how a lack of agility can have a significant impact on a project, and gives some general properties on agility with respect to a project's structure.     

Risk: For Whom? Representations of Mining Activity by Different Social Actors in the Molango Manganese District of Hidalgo,Mexico

Previous studies have shown high levels of manganese exposure and neurocognitive damage in the population living in the mining zone in Molango, Mexico. One of the objectives of the Intersectoral Group on Environmental Management for the mining district has been to provide public participation in the risk management plan. To achieve this, it is important to know how the different social actors represent the mining activity. The objectives of this study were to characterize the social representations of the mining activity by different social actors. A qualitative design was used based on in‐depth interviews of residents, public officials, and a mining company representative. The analysis was conducted according to themes for each group of actors. Essentially, distinct social representations of the different mining activities were identified. Residents viewed mining activities as synonymous with contamination and, therefore, as having affected all areas of their environment, health, and daily life. These activities were seen as a collective risk. The public officials and the mining company held that there was no evidence of harm and saw mining activities as a generator of regional development. Harm to health and the environment were seen as a stance taken by the communities in order to obtain economic benefits from the company. These images of the “other” are shaped by social, political, and cultural factors. They make it difficult for the actors to reach cooperative agreements and thereby affect progress on the risk management plan. Decisionmakers need to take these differences into account when promoting social participation.     

Sustaining the Financial Value of Global CSR: Reconciling Corporate and Stakeholder Interests in a Less Regulated Environment

In this article we examine the association between corporate social responsibility (CSR) and firm value. This line of research is important since firms continue to invest in CSR even though past studies reveal a limited linkage between financial value and CSR. However, the business case for CSR or “doing good while making a profit,” appears to be advancing within the business ethics literature as a preferred conception of CSR. We conjecture that the greater unification and refinement of both profit maximization and stakeholder interests through corporate acts, not statements alone, will sustain the financial value of CSR in a less regulated global business environment. We study the triangle of what companies say, what companies do, and firm financial performance. We analyze Fortune 250 firms and find a positive association between what companies do based on KLD Research and Analytics, Inc. (KLD) ratings, and what companies state about ethics in their CSR statements. We then employ regression analysis and find that companies’ socially responsible acts are positively associated with overall firm value and financial performance. Yet we do not find a statistically significant association between what companies say regarding ethics in their CSR statements and their financial outcomes. These results suggest that firm value and financial performance is associated with what companies do and not what they say. Our results seem to be driven by multinational corporations (MNCs) and not by non‐MNCs. This is possibly because MNCs generally operate in a less regulated global business environment that often necessitates strong ethical corporate leadership to further stakeholder interests. Overall, these results help reconcile corporate and stakeholder objectives since evidence of a link between financial performance and doing good sustains global CSR.